Hi Davids:
I read over your exchange with Larry Elliot a few times. I think you guys were slightly off the mark in the way you went about this one. The exchange seemed a little odd to me - like you were both talking past each other.

On Elliot's end, he was, no doubt, dismissive of a critique of capitalism more harsh than his own. However, on your end it seemed like you were too simplistic on your analysis of economic growth - a shortcoming you share with Elliot.

For example, you quoted Elliot as writing "One of the beneficial spin-offs of modernisation is that the obsession with growth at all costs has been ditched.’"

But the elite who run the economy are not at all obsessed with economic growth at all costs. For over thirty years, they have been deliberately slowing the rate of growth to bolster their economic power. The Neoliberal era is one marked by slower rates of growth and this has been no accident. Countries like China and Venezuela, who break neoliberal rules, have produced very high rates of economic growth.

You take Elliot to task for reporting "good news" about growth - and his rejoinder was that it would have felt absurd to report it as bad news - that, again, highlights a blind spot that you and he seem to share. GDP growth (what economists call growth) correlates to BOTH genuine progress and destruction as it is currently measured. .
As Robin Hahnel has recently written about this

"…it is important to ask ‘growth of what’ when considering this issue. Much time has been wasted because people have been talking past each other and talking about the growth of very different things. What ecological economists call throughput and insist correctly cannot continue to grow is not the same as the gross domestic product that mainstream economists talk about growing…

Supplies of different materials from the biosphere (and beneath) that we use as inputs in production are finite and limited, and the capacity of the biosphere (and the atmosphere above) to absorb material wastes is finite and limited as well. So infinite growth of throughput is impossible…. However, throughput is not gross domestic product (GDP). And when mainstream economists talk about growth, they mean growth of GDP…. GDP is the value of final goods and services produced during a year. It is measured in dollars, not in the units we use to measure different kinds of physical matter throughput….. So it is theoretically possible for GDP to grow infinitely even though throughput cannot grow infinitely provided “throughput efficiency” grows as fast as GDP, i.e. if there is enough of what is now called ‘decoupling.’”

The word “value” from the quote above from Hahnel is the key. The value of final goods and services is not the same as quantity. There is a whole other discussion to be had about how prices – as determined in any capitalist economy- distort measures of value – and therefore of GDP. .

Finally, I suspect (and I may be of course be quite wrong) that Elliot’s guard would not have been raised so quickly if you had challenged him to publish or debate Hahnel -or the authors you cited – in the Guardian rather than agree with them.

Many thanks for your frank feedback – it’s given me pause for thought, so that’s good and it’s much appreciated. And I know and value the fact you’ve been following us closely for years and been very supportive.

For me, the important points of the exchange with Elliott are that:

(a) in the Guardian (and also his book ‘Fantasy Island’), he has barely scratched the surface of the deep systemic issues on the economy covered by Shutt, Bakan, David Harvey and many others.

(b) there are fundamental structural reasons about the media why Elliott (and others) consistently fail to report accurately and honestly – reasons which he is clearly unwilling to debate in public.

Most people who have responded to us have said that the exchange nailed the above points. The contributions made by Bakan and Shutt are pretty devastating. One experienced journalist told us afterwards:

‘Congratulations on this brilliant Alert. As moral and intellectual energy at full throttle, this is a model. You demolish the 'liberal' collaborator's specious arguments.’

But we’re not going to convince everyone all the time, even (especially?!) longstanding supporters.

I thought your point (or rather Hahnel’s point) about GDP/growth was tangential to the alert; while other points you made didn’t seem quite right. Notably: that elites ‘have been deliberately slowing the rate of growth to bolster their economic power’ is not an argument I recognise from reading books written by David Harvey, for instance; especially his excellent ‘A Brief History of Neoliberalism’.

And when you wrote:

‘GDP growth (what economists call growth) correlates to BOTH genuine progress and destruction as it is currently measured.’

I couldn’t follow your meaning.

I asked Harry Shutt for his take on the economic points you raised. First, he dismissed ‘the incredible notion that the elite have deliberately engineered the 30-year global slowdown in growth. How would that bolster their economic power when it has a direct causal link to the market meltdown and financial upheavals of the last 10-15 years?’

He continued:

‘The distinction between throughput and GDP (value added) as described does not seem useful - or even meaningful. I thought the idea that there are physical limits to growth (due to resource or raw material exhaustion) had been largely discredited in the 70s, bearing in mind the potential for overcoming these constraints via technological innovation. What is a far more serious limitation on growth is that of the market - i.e. the capacity to expand demand fast enough to absorb the surplus of capital (elementary Marxist analysis, but well enough understood by non-Marxists who are familiar with the basic dynamics of the business cycle) - now compounded by tech change raising the productivity of capital and thus the level of output / demand needed to absorb capital and labour.’

He said that your analysis seemed to overlook all this, ‘which is a serious handicap’, and he added:

‘Once you bring demand into the equation you have to recognise that it isn't even theoretically possible for GDP to "grow infinitely" - or certainly not at a fast enough rate to absorb the excess capacity of capital and labour.’

Finally, Shutt says:

‘I simply don't understand the sentence "GDP growth (what economists call growth) correlates to BOTH genuine progress and destruction as it is currently measured".’

It’s interesting you suggested that we could have challenged Elliott to debate with Shutt, for instance. Maybe we should have put that direct to Elliott. But then again, as we said in the alert, Shutt has tried very hard for 15 years and more to get his ideas debated in the Guardian and other national media: Elliott is aware of Shutt’s work and still persists in shunting it to the margins and beyond.

We’re going to keep trying to smoke out liberal gatekeepers like Elliott.

Thanks for the thoughtful reply. All of what I have written to you – and will write - is intended to be supportive. I think you guys know by now that I think the world of your work.

It’s uncontroversial that that the Neoliberal era has been characterized by a significant drop in economic (GDP) growth (and increased financial instability). See, for example, the Scorecard on Globalization by Dean Baker and Mark Weisbrot.

A country that has largely escaped both of these consequences is China which has obviously rejected many key neoliberal policies.

The elite will not abandon neoliberalism because it depresses economic growth any more than they will renounce war because it increases the threat of terrorism against them (and us). “Growth at all costs” does not drive economic policy any more than “security at all costs” drives foreign policy. Both security and economic growth are readily sacrificed in pursuit of power. The fact that the pursuit of power may backfire due to elite incompetence (or unavoidable limitations) does not refute this.

You quote Shut[t] as dismissing “‘the incredible notion that the elite have deliberately engineered the 30-year global slowdown in growth. How would that bolster their economic power when it has a direct causal link to the market meltdown and financial upheavals of the last 10-15 years?’

Again, the slowdown didn’t happen by accident, was avoided in places where key neoliberal rules were broken, and yet did not lead to any change in policy. And it obviously DID bolster the power of the financial elite. Thankfully, elites are very far from omnipotent (or, arguably, competent) and have lost influence in some places- for example the case of the IMF in much of Latin America – as a result of their policies.

Significantly, economic growth quickly improved in countries where the IMF (and/or its ideas) lost the most influence – Argentina, Venezuela, Bolivia. This, again, shows that maximizing GDP or “growth at all costs” is clearly not what drives elite outfits like the IMF.

Both you and Shutt say you were mystified by my remark that “GDP growth (what economists call growth) correlates to BOTH genuine progress and destruction as it is currently measured.”

GDP measures output of “goods” and “services”. No doubt, many of those “goods” and “services” should really be called “bads” and “disservices”. Intro economic textbooks point out that $100 of new medicine or $100 new guns both get counted as $100 of GDP.

Around the world child mortality rates have fallen – even in very poor countries. They fell faster in the pre-neoliberal era when GDP growth was also faster. This has been shown to be the case even if you account for the difficulty of maintaining a constant rate of improvement in child mortality rates as they decrease over time. Again, see the Scorecard on Globalization. GDP growth therefore captures good things that happen but also destructive things – production of wasteful or harmful “goods” and “services”.

Does that clarify what I meant?

Shutt wrote

“‘Once you bring demand into the equation you have to recognise that it isn't even theoretically possible for GDP to "grow infinitely" - or certainly not at a fast enough rate to absorb the excess capacity of capital and labour’ and noted that his reasoning flows from a Marxist analysis of the business cycle.

Seems to me he is arguing against the sustainability of GDP growth within a capitalist economy. If so, in a very general way, I agree with him. However, does abolishing capitalism require abolishing economic growth? I don’t think so. I think it is capitalism that is ecologically unsustainable – and abhorrent even if it were. I agree with Hahnel that

“The problem is not that human beings have become more and more economically productive—which is what people should mean when they say that, at least in theory, human economic well-being can grow without limit. Infinite economic growth should be a comment on the capacity of humans to continue to become more and more clever in how we go about our economic activities. It is an expression of faith that there is no inherent reason we cannot continue to satisfy our economic needs in an ever-shrinking portion of the twenty-four-hour day—if only we do not needlessly expand our economic needs!”

Thanks for clarifying what you meant – good points. And I understand that ‘growth’ as conventionally measured can mean growth in good things as well as bad – it hadn’t been clear to me that that’s what you meant. I agree we need to measure economic growth - or much better, economic health – in proper terms that reflect human and planetary well-being. I think we were partly at cross-purposes, and maybe both of us have got hung up about the phrase ‘growth at all costs’ (for my part, perhaps I need to use it more carefully in future, although it wasn’t crucial to the alert).

I realise it’s a documented fact that rates of economic growth slowed and stagnated in the neoliberal era. It’s your claim that this specific feature of neoliberalism was intended – “deliberately engineered” – that doesn’t make sense to me (or Harry Shutt – or others such as David Harvey, from what I’ve read). But if you mean that neoliberalism enabled the consolidation of power by class elites, then - yes, I agree.

We wrote about neoliberalism and the so-called ‘success’ stories (as proclaimed by the corporate media and politicians) of China (and India) here:

To return to the recent alert in question, these are issues that Elliott, the Guardian and the corporate media routinely ignore – that was the thrust of the argument.

Good quote from Hahnel – it’s hard to disagree with his comments. And as the playwright John McGrath wrote, we should all fight for a system of economics ‘that involves every individual in the creation of the future he or she wants, that measures progress by human happiness rather than by shareholders’ dividends, that liberates minds rather than enslaving them.’ (Notes to ‘The Cheviot, the Stag, and the Black, Black Oil’)

I realize that saying slow growth was "deliberately engineered" may be too strong for some to accept. To what extent do eiltes understand the impact of their own policies? That's not always clear. Do they not blunder massively? Of course they do. There is Chomsky's remark about elites being "ideological fanatics". One very well infomred, progressive economist told me that he thinks elite policy makers are part of a club that is similar to the Medieval Church. I'm sure there is a lot of truth in all of that.

However, when you look at monetary policy, for example, its explicitly stated goal is to prevent the economy from "over heating" (i.e. growing too fast). Central Banks deliberately aplply the breaks to the economy to prevent "inflation" which at times they openly concede really means preventing workers from gaining bargaining power. There is that infamous remark by Alan Greenspan, about what a great thing "worker insecurity" is.

To put it another way, it is no secret that growth rates have fallen over the last 30 years. It seems far fetched to believe that policy makers are unaware of it. Even if they truly regretted slow growth they deliberately pursue the same policies anyway. Simlarly, I don't believe the elite want bombs going off in cities like London, New York or Tel Aviv, but it is not enough to get them to change their polcies.

So yes, I think slow growth is deliberate - whether it is deliberate and also regretted or ignored I think we can only guess.

Thanks again for taking the time to reply. Feel free to post if you think others might find it interesting and useful